GBBC Submits Response to HM Treasury on the Draft Statutory Instrument amending the FSMA 2000 (Cryptoassets) Regulations 2026
Published
GBBC has submitted our response to HM Treasury on the draft statutory instrument amending the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.
The draft SI is a targeted intervention ahead of the broader Phase 2 cryptoasset reforms and the forthcoming payment services reforms. It removes UK qualifying stablecoin payments from the cryptoasset dealing perimeter, clarifies the temporary settlement exclusion, exempts proprietary trading and market-making from dealing authorisation, and extends Article 40 safeguarding exemptions to central securities depositories and their nominees for cryptoassets.
In our response, GBBC supports the direction of travel while making targeted recommendations on the design choices that will determine whether the SI delivers on its policy intent in practice. In particular, GBBC emphasizes the need to:
🔹introduce a recognition mechanism for non-UK qualifying stablecoins so that the carve-out reaches the instruments that members are operationally using during the interim period;
🔹refine the lending and borrowing perimeter so that institutional collateral arrangements, repo and corporate lending are not inadvertently captured alongside the retail-facing protocols the regime is designed to address;
🔹address the interaction between the SI's dealing carve-out and the FCA's arranging perimeter guidance, so that the practical benefit of Chapter 2 is not absorbed on the arranging side;
🔹calibrate the market abuse regime by reference to market impact rather than authorisation status, so that proprietary trading firms exempted from licensing remain within the integrity perimeter; and
🔹manage the sequencing across this SI, the FCA's CP26-13 perimeter consultation, the payment services reforms and the Bank of England's systemic stablecoin regime, so that firms are not navigating duplicative perimeters during the interim period.
We are grateful to our members for their contributions to this work and for the practical insights they brought to the development of the response.
GBBC welcomes HM Treasury's engagement on these questions and stands ready to continue supporting the development of a UK cryptoasset regime that is competitive, coherent, and aligned with the operational reality of the firms it is designed to serve.
Read the full response here.